The product combination is a critical issues this presentation covers some of the key points to be considered and comes from the 1stoutsource business forum where more can be downloaded.

1. Slide: 1
The Marketing Mix: Product

2. Slide: 2
Dr. Stephanie J. Morgan
Marketing mix 1: Product
Marketing Principles and Practices

3. Slide: 3
Objectives
By the end of the required reading and lecture you should be able to:
 Define products, asses ways to evaluate, discuss issues associated with
the product life-cycle concept.
 Complete a new product plan.
 Explain factors that make a successful brand, and the difference between
brand extensions and stretching.
 Apply the growth-share matrix and explain its use.

4. Slide: 4
14D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill
Marketing Mix and Customer Needs
Customer
needs
Key customer
requirements
Competitive
advantage
Marketing
mix Product
 Price
 Promotion
 Place
Marketing mix

5. Slide: 5
Defining a product
Product is a physical good, service, idea, person, or
place that is capable of offering tangible and
intangible attributes that individuals or organisations
regard as so necessary, worthwhile or satisfying that
they are prepared to exchange money, patronage or
some other unit of value to acquire it.
(Brassington & Pettit, 2006)

6. Slide: 6
So what is a product or service?
 Anything which is capable of satisfying customer needs.
 Physical products provide a service, product offerings include services,
usual to differentiate by extent of tangible goods delivered.
 Can classify by durability and tangibility.
 Consumer goods include: convenience, shopping, specialty, unsought
categories.
 Industrial goods include: materials and parts (raw or manufactured),
capital items, supplies and business services categories.

7. Slide: 7
Product/Service Levels
Core
Benefit
Basic
Expected
Augmented
Potential

8. Slide: 8
Understanding the Product Range
 Product mix – total sum of all products and variants
offered (e.g. all products sold by Cadbury-Schweppes)
 Product line – group of closely related products)(e.g. the
Cadbury chocolate bars.
 Product item – individual products within lines (e.g. Flake)

9. Slide: 9
Product Assortment (Mix)
Product Assortment Width
Product
Line
Length
Detergents:
Dreft
Tide
Dash
Bold
Toothpaste:
Gleem
Crest
Bar Soap:
Zest
Safeguard
Coast
Oil of Olay

10. Slide: 10
Differences between Features and Benefits
 Use the ‘so what’ question to develop benefits.
 Benefits should be aimed at the target market(s).
 E.g. ‘heat up quick’ for curlers as ‘high speed when you are in a
hurry’ for busy working wives.
 Consider also how these features compare to competition,
‘easy to use’ may seem an obvious benefit (although may need
to explain this saves time and hassle) but is it really easier to
use than the alternatives? If it is, can make more of the
benefits of this – that can set a ‘frame’ in the buyers mind that
they need such simplicity, and the competition will then lose
out.

11. Slide: 11
Branding
Branding seeks to create and communicate a three-
dimensional character for a product that is not easily
copied or damaged by competitors’ efforts.
Think of some brands you know well, why are they so
memorable?

12. Slide: 12
Brand Defined
A brand consists of any name, design, style, words, or
symbols, singly or in combination, that distinguish one
product from another in the eyes of the customer.

13. Slide: 13
3D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill
Creating a brand
Quality and
design Packaging
Core
product
Brand potential
Brand
potential
Brand
potential
Delivery
Brand
name
and
images
Service
Guarantees

14. Slide: 14
4D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill
Building successful brands
Quality
Well-blended
communications
Being first
Internal
marketing
Repositioning
Positioning
Long-term
perspective
Brand
building

15. Slide: 15
5D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill
The anatomy of brand positioning
Brand
domain
Brand
positioning
Brand
values
Brand
reflection
Brand
personality
Brand
assets
Brand
heritage

16. Slide: 16
Table 7.1 Brand Preferences
Which brands are most loved? Most hated?
What impact does the lack of colour and logo have?
GOOGLE NOKIA
COCA-COLA
SUNNY D
MACDONALD’S
MANCHESTER UNITED

17. Slide: 17
Brand positioning:
A brand’s position in the market-place can be analysed using six
elements:
 Brand domain: the brand’s target market, i.e. where it competes in the
marketplace.
 Brand heritage: the background to the brand and its culture. How it
has achieved success (and failure) over its life.
 Brand values: the core values and characteristics of the brand.
 Brand assets: what makes the brand distinctive from other competing
brands such as symbols, features, images and relationships?
 Brand personality: the character of the brand described in terms of
other entities such as people, animals or objects.
 Brand reflection: how the brand relates to self-identity; how the
customer perceives him/herself as a result of buying/using the brand.

18. Slide: 18
Figure 7.5 The Brand Name Spectrum
Descriptive Associative Freestanding
Bitter Lemon
Dairy Milk
Chocolate
Shredded
Wheat
Walkman
Natrel
Bold
Sensodyne
Kodak
Esso
Pantene
Mars Bar

19. Slide: 19
Benefits of Branding
for the Consumer
 Easier product identification
 Communicates features and benefits
 Helps product evaluation
 Establishes product’s position
 Reduces risk
 Creates interest

20. Slide: 20
Benefits of Branding
for the Manufacturer
 Helps create loyalty
 Defends against competition
 Creates differential advantage
 Allows premium pricing
 Helps targeting/ positioning
 Increases power over retailer

21. Slide: 21
Brand Extension
 Use brand name goodwill (higher company value + brand equity) release in
same market (broadly)
 Lower risk and lower cost than alternatives
 Distributors and consumers may perceive less risk.
 May fail if do not offer functional, psychological or price advantage.
 Cannibalization can also occur (new brand gains at expense of established).
 Danger of underfunding, overconfidence, focus on minor modifications.
 Bad publicity for one affects reputation of others.

22. Slide: 22
Mars Utilizes
Brand Extension
When it’s hot and you want something sweet, sticky and firm,
a MARS® ice cream should hit the spot.
® MARS is a registered trademark of Masterfoods.
Source: © Masterfoods 2006 http://www.mars.co.uk

23. Slide: 23
Brand Stretching
 Established brand name used in unrelated markets.
 Can keep cost and effort down compared to new brand – if fits values
inherent in core.
 New brand area can damage reputation of core brand.
 Too much stretching reduces credibility.

24. Slide: 24
Figure 7.6 Aspects of
Product Quality
Performance Durability
Corporate name
and reputation
Design
and style
Reliability
and maintenance
Quality

25. Slide: 25
Packaging Issues
 Labelling
– Warnings
– Instructions
– Regulated information
– Size
– Contact information
 Design
– Aesthetic appeal
– Ergonomic properties
– Functionality
– Reliability
– Life span

26. Slide: 26
Product Life Cycle (Whole Industry Sales)
TIME
SALES
Introduction Growth Maturity Decline
D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill 10
Low growth,
losses.
Objective:
build sales by
expanding
market, create
product/brand
awareness
Foster sales
and profit.
Objective:
build sales
and market
share,
penetrate by
build brand
preference
Sales peak and
stabilise.
Objective:
maintain share
with product
improvements
Reduced
demand, new
tech or changing
tastes.
Objective:
minimize losses,
move on.

27. Slide: 27
Evaluating the Life-Cycle Concept
 As usual, an aid to thinking, need to understand limitations to avoid being
misled.
 Fads (e.g. cabbage patch dolls) and Classics (e.g. mars bars) defy
lifecycle.
 Life-cycle may be driven by the marketing activity – need to check
assumptions (e.g. extra advertising may reinvigorate sales at ‘end’ of life).
 Duration and timescales are unpredictable – limits forecasting.
 Can be overly prescriptive – may be situations where a different strategy is
needed than recommended here (e.g. build in decline instead of withdraw,
if market still viable and all competitors have already withdrawn!)

28. Slide: 28
11D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill
The Boston Consulting Group
Growth-Share Matrix
Stars Problem
children
Cash cows Dogs
7%
15%
0%
Market
Growth
Rate
Market Share10 0

29. Slide: 29
12D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill
Strategic objectives and the
Boston Box
 Build sales and/or market
share
 Invest to maintain/increase
leadership position
 Repel competitive challenges
Stars
• Build selectively
• Focus on defendable niche where
dominance can be achieved
• Harvest or divest the rest
•Problem children
• Harvest or
• Divest or
• Focus on defendable niche
•Dogs
• Hold sales and/or market
share
• Defend position
• Use excess cash to support
stars, selected problem
children and new product
development
•Cash cows

30. Slide: 30
13D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill
Strategic objectives and the
Boston Box
 Build selectively
 Focus on defendable niche
where dominance can be
achieved
 Harvest or divest the rest
Problem children
• Harvest or
• Divest or
• Focus on defendable niche
•Dogs
• Build sales and/or market share
• Invest to maintain/increase
leadership position
• Repel competitive challenges
•Stars
• Hold sales and/or market
share
• Defend position
• Use excess cash to support
stars, selected problem
children and new product
development
•Cash cows

31. Slide: 31
14
Strategic objectives and the
Boston Box
 Hold sales and/or market
share
 Defend position
 Use excess cash to support
stars, selected problem
children and new product
development
Cash cows
• Build selectively
• Focus on defendable niche where
dominance can be achieved
• Harvest or divest the rest
•Problem children
• Harvest or
• Divest or
• Focus on defendable niche
•Dogs
• Build sales and/or market share
• Invest to maintain/increase
leadership position
• Repel competitive challenges
•Stars
D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill

32. Slide: 32
15D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill
Strategic objectives and the
Boston Box
• Build sales and/or market share
• Invest to maintain/increase
leadership position
• Repel competitive challenges
•Stars
• Build selectively
• Focus on defendable niche where
dominance can be achieved
• Harvest or divest the rest
•Problem children
 Harvest or
 Divest or
 Focus on defendable niche
Dogs• Hold sales and/or market
share
• Defend position
• Use excess cash to support
stars, selected problem
children and new product
development
•Cash cows

33. Slide: 33
16D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill
The case of an
unbalanced portfolio
High
Low
LowHigh
Marketgrowthrate
Market share

34. Slide: 34
Disadvantages of the Boston Matrix
 Based on cash flow, are other criterion, including ROI that may be more
useful.
 Depends on market share – can lead to over-focus.
 Ignores interdependence between products – can lead to costly mistakes,
need a systems approach.
You could treat market growth rate as proxy for market attractiveness
(depending on other information), and market share as an indicator of
competitive strength. As with all tools, depends on how you use it and
your understanding of its limitations.

35. Slide: 35
19D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill
Product growth strategies:
the Ansoff Matrix
Market
penetration or
expansion
Product
development
Diversification
Market
development
Existing
New
Existing New
Products
Markets

36. Slide: 36
20D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill
Increase sales volume
Entry into new markets
Market development
Product development
Market expansion
Market penetration
Strategic options for
increasing sales volume
(Win from competitors,
buy competitors, discourage entry)
(convert non-users, increase usage)
(Extension, innovation, replace)
(Promote new uses,
enter new segments
(New products or services)

37. Slide: 37
2D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill
What is a new product?
New-to-the-world
products
New
product
lines
New
Products
Product
replacements
Additions to
existing
lines

38. Slide: 38
3D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill
Creating and nurturing an
innovative culture
Reward
success
heavily
Clear messages
about the role
and importance
of innovation
Back words
with resources
Resist automatic
nay-saying
Give time
Off or ‘turn a
blind eye’ to people
working
on pet
projects
Tolerate
failure
Be accessible
Innovative
culture

39. Slide: 39
5D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill
The eight-stage new product
development process
Screening
Concept testing
Business analysis
Product development
Market testing
Commercialization
New product strategy
Idea generation
New products

40. Slide: 40
6D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill
Diffusion of an innovation
34% 34% 16%13.5%2.5%
Innovators Early
adopters
Early
majority
Late
majority
Laggards
Percentageadopting
Time

41. Slide: 41
7D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill
Product replacement strategies
Inconspicuous
technological
substitution
Relaunch
Conspicuous
technological
substitution
No change Facelift
Re-merchandising
Intangible
positioning
Tangible
positioning
Neo-innovation
No change Modified Technology change
No change
Re-mix
New/market
segment
Marketing
Product

42. Slide: 42
Ethical Issues Concerning Products
 Safety: products and services need to undergo extensive safety testing
before launch.
 Planned obsolescence, particularly if extreme, is unethical.
 Deceptive packaging: oversized, slack,
 Misleading labelling, brochures or signage
 Unqualified staff (esp. professional services)

43. Slide: 43
Lecture Objectives?
 Define product, discuss issues associated with the product life-
cycle concept.
 Complete a new product plan.
 Explain factors that make a successful brand, and the
difference between brand extensions and stretching.
 Apply the growth-share matrix and explain its use.